China’s Shanghai Composite Index caps longest streak of gains in 25 years
Although investors are optimistic over outlook for this year, signs indicate that Chinese stocks are technically overbought and are poised to decline in the short term
Just two days after Hong Kong’s Hang Seng Index recorded its longest rising streak in history, China’s benchmark stock gauge shattered a similar milestone that stood for 25 years.
On Friday, the Shanghai Composite Index closed up 0.1 per cent at 3,428.94, gaining for an 11th consecutive session. The stretch is the longest since a run of 14 days ended in May 1992.
China’s stabilising economy, continuing earnings growth and overseas fund inflow ahead of mainland equities joining MSCI benchmarks in June are among the factors investors and strategists have pointed out for their optimistic outlook about the nation’s stocks this year.
China’s offshore market is also enjoying the party. The Hang Seng Index recorded a streak of 14 consecutive days of gains on Friday, the longest such run since its inception in 1969. The gauge is now 1 per cent away from its all-time high set a decade ago.
China and Hong Kong stocks are rising “amid positive global sentiment”, said Hong Hao, managing director at Bocom International Holdings. “Global markets are rising on the back of solid economic numbers and interest rate hikes by central banks.”
